NEW YORK, July 20 (Reuters) - Citigroup Inc trimmed its outlook on Friday for the profitability of its North American branded credit cards business to a 2.15 percent return on assets from 2.25 percent.

Chief Financial Officer John Gerspach, speaking in a quarterly conference call with fixed income investors, said the revision is a result of changing interest rates and a greater portion of the business coming from its new Costco co-branded card.

The Costco card, he said, is outperforming expectations and will bring in more revenue and income but with a lower return on assets.

Gerspach said the Costco card business, which Citigroup won by outbidding American Express, is exceeding the bank's targets for numbers of accounts, use by customers, revenue and return on assets.

Gerspach's comments provided a hint of the details that analysts expect to hear from Citigroup on Tuesday when the bank holds its first "investor day" conference since the financial crisis.

He also said that Citigroup's retail services division, which mostly issues store-branded cards in the United States, is still expected to earn a 2.50 return on assets despite a rise in the rate of losses on accounts because of new problems collecting from delinquent borrowers.

The two North American credit card businesses provided nearly 20 percent of Citigroup's income from continuing operations in 2016. (Reporting by David Henry in New York; Editing by Cynthia Osterman)